Case Digest: MANILA MEMORIAL PARK CEMETERY, INC. v. Lluz et al.

G.R. No. 208451

February 03, 2016

CARPIO, J.:

Facts:

Petitioner Manila Memorial Park Cemetery, Inc. (Manila Memorial) entered into a Contract of Services with respondent Ward Trading and Services (Ward Trading). The Contract of Services provided that Ward Trading, as an independent contractor, will render interment and exhumation services and other related work to Manila Memorial in order to supplement operations at Manila Memorial Park, Paranaque City.


Among those assigned by Ward Trading to perform services at the Manila Memorial Park were respondents Ezard Lluz, Norman Corral, Erwm Fugaban, Valdimar Balisi, Emilio Fabon, John Mark Aplicador, Michael Curioso, Junlin Espares, and Gavino Farinas (respondents).


Respondents alleged that soon after the management declined their request for regularization and to be recognized as legitimate members of the existing labor union,the latter dismissed them. Hence, this case for illegal dismissal.


By way of defense, Manila Memorial argued that there was no employer-employee relationship between the company and respondents. Instead, It argued that respondents were the employees of Ward Trading.


Issue:

Whether or not an employer-employee relationship exists between Manila Memorial and respondents for the latter to be entitled to their claim for wages and other benefits.


Ruling:

Contracting arrangements for the performance of specific jobs or services under the law and its implementing rules are allowed. However, contracting must be made to a legitimate and independent job contractor since labor rules expressly prohibit labor-only contracting.


Labor-only contracting exists when the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal and any of the following elements are present:

1) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or

2) The contractor does not exercise the right to control the performance of the work of the contractual employee.


In the present case, The Contract of Services proved the existence of labor-only conrtacting between Manila Memorial and Ward Trading. The Contract of Services provided that Ward Trading, as an independent contractor, will render interment and exhumation services and other related work to Manila Memoria.However,a closer reading of the Contract of Services reveals that Ward Trading does not have substantial capital or investment in the form of tools, equipment, machinery, work premises and other materials since it is Manila Memorial which owns the equipment used in the performance of work needed for interment and exhumation services. Furthermore, although Ward shall be in charge of the supervision over individual respondents, the exercise of its supervisory function is heavily dependent upon the needs of petitioner Memorial Park. The contract further provides that petitioner has the option to take over the functions of Ward's personnel if it finds any part or aspect of the work or service provided to be unsatisfactory


Manila Memorial failed to adduce evidence to prove that Ward Trading had any substantial capital, investment or assets to perform the work contracted for. Thus, the presumption that Ward Trading is a labor-only contractor stands. Consequently, Manila Memorial is deemed the employer of respondents.

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